The Treasury Department released its monthly statement on Friday and has now confirmed what we all suspected: the US federal government, under the Trump Administration, will finish the 2026 fiscal year with an annual fiscal deficit of about $2 trillion.
To be precise, the federal deficit for the 2026 fiscal year, which ended on September 30, is $1.99 trillion. That’s the third largest deficit ever recorded. From fiscal year 2025 to 2026, the deficit grew by 12 percent and that’s the largest growth rate since 2023. Last year, the federal deficit was $1.84 trillion, which was slightly smaller than the 2024 deficit of $1.95 trillion.
Even when adjusted for CPI inflation, however, 2026’s deficit remains the third largest ever, even including the Second World War, when the deficit in 2026 dollars reached an eye-watering $1 trillion.That was considered an off-the-charts deficit at the time. Today, World-War-Two style spending looks quaint compared to Covid-era spending and the past two years of Trump deficits.
